In field and for food, the return of structural adjustment

by Rahul Goswami, originally published by Fahamu, South Africa - Emerging Powers in Africa Programme
| Mar 2, 2011

The new land calculus that is being employed for analyses of Africa is created by the coming together of technology and finance. It assesses the continent using a fine grid that is electronically laid out over the land. This grid is the electronic operating topography, created by a model which makes extensive use of satellite imagery, remote sensing analysis and existing databases on terrain and climate, soil and population, water and infrastructure. In this view of Africa, a grid represents a potential investment sink to be harvested after a high-technology crop cycle. The characteristics of a grid square indicate its per hectare revenue and profitability in dollar terms.

A food crisis in northern Burundi’s Kirundo province – the result of failed rains – has prompted many women to make a long daily commute to neighbouring Rwanda, where a day’s work in a field earns them just enough money to feed their family for a day. Photo: IRIN/Judith Basutama.

Africa is not unique in being dissected through the combination of earth sciences grid and database. All of the developing South has been covered by such grids - South America, Asia (East, South and South-East), the Maghrib and West Africa. Graded according to per hectare output that ranges from the equivalent of US$167/ha to over US$2,500/ha, countries and regions in sub-Saharan Africa are weighed for investment by a variety of criteria: type of soil, agro-ecological types, availability of transport infrastructure and logistics, type of terrain, vegetation indices, watersheds, distance from port, productivity of land already under cultivation, and of course population and demographics.

The first employers of this formula are the investment cartels that control much of the world's grain movement, the flows of edible oils and which are responsible for the dominance of agricultural commodities trade. They also exercise control over the actual flow of food from aggregating markets to ports to retail chains. It is they who have the business models to protect and who leverage corporate power to revoke or alter national legislation to suit their needs. Yet the creator of this formula is the global development apparatus, including several United Nations agencies, specialised organisations such as the Food and Agriculture Organization, the World Health Organization and the Consultative Group on International Agricultural Research. These have provided the evocative basis for the formula - the human development needs, the gap in reaching the Millennium Development Goals, the sustainable development arguments, the health-education-gender dimension.

Students in the central region of Daloa, Côte d'Ivoire. Photo: IRIN/Alexis Adele.

Left at that, the formula may well have been just what the world's tens of millions of smallholder farming households could find a use for - an assessment that is as holistic globally as it is specific locally. But the formula was not left to be used through the lens of human development and sustainable natural resource use. The multilateral funding agencies took control, and immediately the assessment grid was bent towards 'market' needs. Thus we have today, operating for all of Africa barring the Saharan belt, an "an integrated agro-ecological and socio-economic methodology" whose nominal owners are the International Institute for Applied Systems Analysis (IIASA) and the UN Food and Agriculture Organization (FAO). Its methodology rests atop what is called a global database for assessment of policy options for food security and sustainable agricultural development. It has been applied by the World Bank "to provide global, regional and national insight and decision support for investors and host-country governments" and it is presented as being able to "facilitate sustainable and responsible international agricultural land investments".

We have heard such terminology before, in the 1970s and 1980s, when it was used to describe the crippling structural adjustment programmes of the World Bank and the International Monetary Fund. They are indeed back, now as structural agri-food adjustment programmes, and 25 years later they are formidably armed with new machinery provided by the urgency of the triple crisis: climate change, economic volatility and food shortages.

Children at a vaccination centre in Djibouti city. Photo: IRIN.

The formula has been used to shortlist countries suitable for receiving agri-land investment and, in this iteration of the grid assessment, the threshold is set at countries which have at least three million hectares of "suitable" land - defined as non-cultivated, non-forested and non-protected land. Long and bitter experiences in developing Asia tell us that the definitions of 'cultivated', 'forested' and 'protected' are all too often unscientific, and can be strikingly different between an act of legislation and its subsequent amendment. These definitions can and do quickly become politically loaded. Now, with the employment of this formula, they become market definitions, since the formula includes population only as a deflator of final crop output.

Under the analysis, the countries of the sub-Saharan Africa region are ranked by the availability of such "suitable" land in their territories (in million hectares): Sudan 46.02; Democratic Republic of Congo 22.49; Mozambique 16.25; Madagascar 16.24; Chad 14.81; Zambia 13.02; Angola 9.68; Tanzania 8.65; Central African Republic 7.94; Ethiopia 4.72; Cameroon 4.65; Kenya 4.61; Mali 3.90; Burkina Faso 3.71; South Africa 3.55; and Congo 3.47. What does this ranking mean? "In most of Africa, area expansion has been based on smallholder agriculture in the context of population growth," explained a World Bank report, issued in 2010 September. "Also, structural issues arising from this long-standing neglect of technology, infrastructure, and institutions continue to limit competitiveness. In many cases, they contributed to disappointing performance of commercial cultivation of bulk commodities, where Africa can have a comparative advantage." This report is the now infamous 'Rising Global Interest in Farmland: Can It Yield Sustainable and Equitable Benefits?' and the question posed concerning benefits is entirely rhetorical.

Internally displaced people in the Afgoye Corridor, Somalia. The displaced have been holding demonstrations to protest allegations that two NGOs were planning to discontinue water provision to the camps. Photo: IRIN/Abdisamed Mugadishu.

"Instead, success with export agriculture was limited to higher-value crops such as cotton, cocoa, and coffee, and more recently horticulture," stated the World Bank report. "At the same time such gaps also affect smallholder performance. In fact, none of the Sub-Saharan African countries (e.g. Mozambique, Zambia, Sudan, or Madagascar) that recently attracted investor interest achieved more than 25% of potential yields, and area cultivated per rural inhabitant remains well below 1 ha. If technology, infrastructure, and institutions can be improved, higher global demand for agricultural commodities can bring large benefits to existing producers and countries." The Bank calls it agricultural commodities, those living under poverty lines (or just above) in South Asia and sub-Saharan Africa call it food.

The difference in terminology has, since the food price spikes of 2007-08, been politically and socially sensitive. The trading of agricultural commodities - and the ubiquity of agricultural futures products on the world's busiest commodity trading exchanges - has been blamed for both the price spikes of recent years, in 2007-08 and the 2010-11 condition which continues. This is true, but is not the only factor responsible for the uptrend in foodgrain prices in developing countries. At work also is the economic project to encourage urbanisation in the developing South, advance the case for economic growth rates as the definer of a country's 'progress', and leach the rural commons of both population and small farms. UN Habitat tells us that ten years ago in 2001, 37% of China's population lived in urban areas, 471,927,000 people; and 28% of India's population lived in urban areas, 285,608,000 people. In 2010 these numbers had grown to 44.9% and 607,230,500 people in China; 30.1% and 366,858,300 people in India.

Men at a fish-farming site in Cameroon. Photo: IRIN/Fanny Pigeaud.

These two populous countries alone exert a staggering pressure on foodgrain demand. In India, the average per capita cereal consumption ranges between 9 and 13 kilo per month for urban areas (for rural areas the average may be slightly higher, but as ever there is considerable variation between regions). In China the average per capita cereal consumption is estimated to have increased steadily during the 'reform period' (1979-1985), after the liberalisation of food production when the annual economic growth rate was over 10%, when China began to import cereals. The estimate for the time was 192 kg per capita annually. Since then, nutritional studies have shown that further economic growth in China has led to a shift in energy requirements, and therefore the structure of the Chinese diet shifted, with cereal consumption declining. For urban India, the transition has followed a similar pattern and the weights of cereals and pulses in the diet have declined. In both countries, this is what has been called a "nutrition transition", and has been exploited as such by the global food retail chains, their regional collaborators and the global agri-food-seed-biotech industry.

Those urban dwellers in China, India and elsewhere who are experiencing the nutrition transition are, in many cases, first or second generation migrants from rural provinces. Their presence in metropolises or urbanising agglomerations represents a profound shift in labour away from the land - the patterns that today dominate smallholder agriculture have much to do with labour and migration, and explain in part why the feminisation of smallholder agriculture is such a widespread phenomenon in the South. Thus we have cultivator-consumer dependency ratios, in developing Asia, which are utterly unsustainable. Rough calculations done for India have shown that districts in which agriculture remains the primary occupation the average ratio is that a cultivator (or agricultural labourer) helps feed 2 to 2.5 people (family included). When fast-growing urban areas are factored in, the ratio climbs to 4.5 and above. The bald truth is that for smallholder farms, these are unfeasible numbers and unbearable pressures. No matter what the conditions are, the families and households look for a monthly basket of food staples to survive. The consequence is labour migration, the conversion of agricultural land to commercial use, or the annexation of agricultural land for industrial farming, which will in almost every case be high-input, high-technology.

A woman working in a stone quarry holding her young baby, Zambia. Women are disadvantaged in both employment and education in Zambia, including in terms of lower remuneration and inferior conditions of employment. Photo: IRIN/Manoocher Deghati.

It is this link - which brings together the consequences of an economic model, population growth, and the corporatisation of the cultivation and food distribution system - that must also be examined when studying the investor-centric land use analyses of Africa. "Sub-Saharan Africa, with its fertile land, ample water resources and the world's lowest agricultural productivity, is the biggest hot spot for agricultural land acquisition by public and private investors from the GCC, China, India and Europe," stated a recent assessment made by the Qatar National Food Security Programme for the Gulf Cooperation Council (GCC). "The agricultural sector in SSA countries is in urgent need of investment capital. However, decades of poor government commitments to agriculture and low investments have resulted in stagnating productivity and food-production levels. The SSA countries' capacity to fill the investment gap is limited and the pledges of ODA are often not delivered."

The "urgent need" is a recurring justification, helped by ample evidence of development gaps, the miseries of populations displaced internally because of conflict, the weakness of partnerships between government and social institutions. The "urgent need" has also become the growing nutrition gap in countries of the South, experienced by both urban and rural poor. It is for both the provision of the monthly basket of food staples and in closing the nutrition gap that the new agri-tech industry is deploying resources and the global grid assessment.

That such evidence is misused to further agriland investment campaigns is also in plain sight, but is not corrected by the intergovernmental agencies working in Africa. The result, to those outside the framework of the 'market', is grotesque: "Parametric assumptions about yield and input levels, and application of a vector of output and input prices adjusted for transport cost spread over an appropriate time period, would allow the computation of expected investment returns and land rents from any given use," is one representative piece of advice that was provided on the sidelines of a international meet on food security held in October 2010. "This would allow host governments to assess their comparative advantages better in negotiations with outside investors. Globally, such information can help investors who are interested in certain types of crop to identify the most appropriate countries and macro-regions to consider."

A member of the Fezeka Community Garden in Gugulethu township, South Africa. Photo: IRIN/Lee Middleton.

Who are the investors whom such information would help? They are the clients of investment firms such as BlackRock, which in early 2010 launched a world agriculture fund, earmarking US$30 million for farmland acquisitions, they are the clients of Goldman Sachs and Morgan Stanley, who already offer investors access to similar funds, they are the clients of firms like the new Agcapita, which focuses exclusively on farmland investment. These are the firms which assess countries based on their contribution to the health of a basket of exchange traded funds, or ETFs, in the agriculture sector. Such complex and sophisticated market instruments are linked by finance to the world's dominant agri-tech companies and trading firms: Archer Daniels Midland, Bunge, Louis Dreyfus, Cargill, Monsanto, Syngenta, Bayer being amongst them. But it is not the transnationals alone that command the flows of food and the control of land. The economic growth in China and India has spawned regional competitors with similar interests, and who possess the advantages of market knowledge and reach that the multinationals do not. There are parallels between the competition for fuel and mineral resources amongst China and India, and their effort to secure agricultural land overseas. The tools employed are similar and often, the finance stems from the same preferred sources.

Ignored entirely by the new agri-investing powers is the evidence of many highly credible and comprehensive scientific studies that confirm the value of small-scale agro-ecological approaches in Africa, documented in detail by civil society organisations, farmworkers and farmer associations, grassroots groups, health and consumer organisations, environmental groups, scientists and academics. These groups share "a recognition that hunger, poverty, and climate change are inter-related through the medium of agricultural policies", and have distributed widely the evidence against commercial, high-input farming that employs bio-technology and genetic engineering ('biofortification' is a new variant) to fulfil commercial market objectives. Their recent critique of the Bill and Melinda Gates Foundation's approach to these issues - directly and through its Alliance for a Green Revolution in Africa (AGRA) subsidiary - is one such effort.

The industry and its supporters (in national governments, in the opaque inter-governmental agri-research networks with their industry connections) are well aware of the power of such opposition. That is why all statements describing international agricultural investments include by default clauses reiterating the need to develop principles for responsible agriculture investment that respect the rights, livelihoods and resources of local communities. These are stock templates, designed to deflect the fallout from a growing number of media reports of land deals between investors and governments in host countries that have failed to ensure that fair benefits will accrue to the local populations.

They are used to mask the key elements of the new structural agri-food adjustment programmes that are already in place in the developing South: agri-investor friendly new industrial policies, the disinvestment by and withdrawal of government equity in profitable public sector enterprises, financial sector 'reform' that ushers in private banking and asset management, the championing of public-private partnership in tandem with cuts in social sector spending, legislative 'reform' to support the new measures, the encouragement of urbanisation and the steady creation of new classes of consumers whose purchasing patterns can be fed into the global grid model. These are the elements of the new structural adjustment programme for crop and field, which represents all that threatens our principles of food sovereignty and social justice.

*** This commentary was published by the 'Emerging Powers in Africa Programme', Fahamu, Cape Town, South Africa in its 'Perspectives on Emerging Powers in Africa' (Issue 6, February 2011). Fahamu makes a significant contribution to media and freedom of expression in Africa, using information and communications technologies. Its flagship publication is Pambazuka News, a pan-African online newsletter with English, French and Portuguese editions.

Rahul Goswami is a Research Associate at the Centre for Communication and Development Studies, India, and worked as a social sector consultant in India's National Agricultural Innovation Project in 2009-10 (makanaka@pobox.com).

Rahul Goswami has worked on a food and agriculture programme (livelihoods and rural economies) of the Government of India since 2009, is a trainer in the Asia-Pacific region for UNESCO's 2003 Intangible Cultural …

Resilience is a program of Post Carbon Institute, a nonprofit organization dedicated to helping the world transition away from fossil fuels and build sustainable, resilient communities. Content on this site is subject to our fair use notice.